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Energy Futures in Storm Aftermath

By October 31, 2012

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As Sandy has passed through the east coast and the cleanup begins, the energy commodities are a focus of investor attention.  There are two things to watch - changes to demand and how long it takes to get refineries back online.

There could be a drop in demand, as it will take a while before energy is restored and driving and energy usage gets back to normal.  The markets will take a hit on the demand side, but it looks like the refineries will resume operations a little quicker than normal.

There is plenty of oil supply and it could build even more if refineries aren't turning the oil into products and energy.  The price of oil has moved up slightly this week, but action has been a little subdued.  I would say overall it is a negative for the energy commodities in the near term.  Without major damage to refineries, the markets could remain slightly rangebound with limited upside.

 

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